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Case 1 :05-cv—00327-GIVIS Document 80 Filed 09/24/2007 Page 1 of 4
SKADDEN, Anne, SLATE, M EA6 n-• ER 2; FL0M LLP
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LONDON
MOSCOW
MUNICH
PARIS
September 24, 2007 E
TORONTO
VIENNA
The Honorable Chief Judge Gregory M. Sleet
United States District Court
J. Caleb Boggs Federal Building
844 North King Street
Lockbox 19
Wilmington, Delaware 19801
RE: In re MBNA Corporation Derivative and Class
Litigation, Lead Case No. 1:05-cv-00327-GMS
Dear Chief Judge Sleet:
We write on behalf of the MBNA Outside Director Defendants (the
"Outside Directors") in response to Plaintiffs' September 18, 2007 letter to the Court,
which sets forth Plaintiffs' latest maneuver for avoiding this Court's decision to
dismiss this action on subject matter jurisdiction grounds. We apologize for having
to burden the Court with further submissions in this matter, but the Plaintiffs' latest
tactic warrants a brief response.
Your Honor will recall that the Outside Directors moved to dismiss
the Consolidated Amended Complaint in this action on a number of grounds,
including lack of subject matter jurisdiction. After full briefing — including sur-reply
briefing on the issue of subject matter jurisdiction — the Court issued a written
opinion granting the Outside Directors' motion, and directed the Clerk of the Court to
close the case. Lemon Bay Partners LLP v. Hammonds, C.A. No. 05-327 (GMS)
2007 WL 1830899, at *5 (D. Del. June 26, 2007). In dismissing the action, the
Court specifically ruled that "the state law claims in this case substantially
predominate over the federal claim. The amended complaint is comprised almost
entirely of state law issues that bear no discemable relationship to the contribution
claim, and the plaintiffs present no persuasive reason for the court to use its
discretionary power to exercise supplemental jurisdiction in this case. Given the

Case 1 :05-cv—00327-GIVIS Document 80 Filed 09/24/2007 Page 2 of 4
The Honorable Chief Judge Gregory M. Sleet
September 24, 2007
Page 2
foregoing, the court concludes that exercising supplemental jurisdiction in a case
such as this 'would be an improper exercise of subject matter jurisdiction, since it
would truly permit the tail to wag the dog."' Id (citing In re Litig. T rust of MDIP,
No. Civ. A 03-779 (GMS), 2005 WL 1242157, at *5 (D. Del. May 25, 2005)).
Importantly, the lone federal count in the Consolidated Amended Complaint was not
even asserted against the Outside Directors.'
In response to the Court's decision, Plaintiffs filed a motion for
reconsideration (D.I. 76) that was fully briefed in accordance with Local Rule 7.1.5,
and is currently pending before the Court. Apparently, Plaintiffs were not satisfied
with waiting for the Court's decision on their own motion. In addition to filing two
new complaints raising virtually the same facts and claims as the dismissed action,
Plaintiffs' September 18 letter is an obvious attempt to file a reply brief to which they
are not entitled. See, e. g. , Power Integrations, Inc. v. Fairchild Semiconductor Int’l.,
Inc., C.A. No. 04-1371-JJF, 2006 WL 2435084, at *2 (D. Del. Aug. 22, 2006)
("[T]he Court agrees with Defendants that Local Rule 7.1.5 does not contemplate the
filing of a reply brief in the context of a motion for reconsideration."); Stairmaster
Sports/Med Prods., Inc. v. Groupe Procycle, Inc., 25 F. Supp. 2d 270, 292 (D. Del.
1998) ("[Movant], apparently anxious to get the last word, filed a reply brief while
Local Rule 7.1.5 distinctly sets out that 'the Court will determine from the motion
and answer whether argument will be granted"').
In their September 18 letter, Plaintiffs continue to disingenuously
claim that by dismissing this case, "the Court overlooked p1aintiffs' request to file an
amended complaint." (Letter at 2) As the Outside Directors explained in their
response to Plaintiffs' motion for reconsideration, no such request was ever made.
See Outside Directors' Response In Opposition To Motion For Reconsideration at 10
(D.I. 78). In fact, Plaintiffs made clear to the Court before the motion to dismiss was
granted that despite attaching a draft amended complaint to their sur-reply briefing,
they "do not now move to re-pleud." Id (quoting Plaintiffs' Sur-Reply at 13
(emphasis added)). As this Court has routinely held, decisions about leave to amend
are based on formal motion practice, not "on covert ’signals' from counsel." See,
e. g., In re Digital Island Sec. Litig., C.A. No. 02-57-GMS, 2002 WL 31667863, at *2
(D. Del. Nov. 25, 2002) ("Had the Plaintiffs been as interested in amending as they
claim to have been, the appropriate response would have been a request for leave to
amend, before the court dismissed their case."), ajfd, 357 F.3d 322 (3d Cir. 2004).
Plaintiffs' latest tactic to avoid dismissal —filing two unconsolidated,
virtually identical complaints in the same Court before the Court has the opportunity
' Similarly, the two new complaints filed by plaintiffs Lemon Bay and Benoit also fail to raise any
federal law claims against the Outside Directors.

Case 1 :05-cv—00327-GIVIS Document 80 Filed 09/24/2007 Page 3 of 4
The Honorable Chief Judge Gregory M. Sleet
September 24, 2007
Page 3
to rule on their motion for reconsideration — is equally without merit. Not only is
this tactic an attempt to interfere with the Court's decision-making process on the
pending motion for reconsideration, it is procedurally unsound for several reasons.
First, the plaintiffs that filed the two new complaints — Lemon Bay
and Benoit- are the subject of an existing consolidation order. See Order of August
25, 2005 (D.l. 28). lt is a violation of that order for those plaintiffs to separately file
two new complaints raising, essentially, the same facts and claims against the same
defendants, especially at a time when the Court is still considering their currently
pending motion for reconsideration.
Second, Plaintiffs made a tactical decision not to amend their
complaint in response to the Outside Directors' motion to dismiss. Plaintiffs are now
bound by that decision, and as a result, cannot simply file two new complaints to
avoid dismissal, or to improve their chances on their motion for reconsideration.
Had they wanted to amend or revise the Consolidated Amended Complaint to avoid
dismissal, they should have done so before the Court granted the motion to dismiss.
See e. g., Digital Island , 2002 WL 31667863, at *1 ("When faced with the
defendants' motion to dismiss, the plaintiffs would have been well within their rights
to request leave to amend. Instead, they chose to oppose the motion, in its entirety,
without seeking such relief. Such an approach is highly suspect as the plaintiffs were
aware of the facts which they now seek to add at the time the original pleading was
filed. Thus, there is no excuse for failure to plead them before the case was
dismissed."). This is particularly true as to Benoit's long-abandoned theory of
diversity jurisdiction, which — apart from its dubious prospects, given that MBNA's
principal place of business was Wilmington, Delaware — was dropped from the case
at the time Plaintiffs tiled their Consolidated Amended Complaint. See Lemon Bay,
2007 WL 1830899, at *5 n.9 ("[S]ince the Plaintiffs failed to affirmatively and
distinctly assert diversity jurisdiction in their amended complaint, the plaintiffs
cannot now assert diversity as a possible basis for subject matter jurisdiction."); see
also Outside Directors' Response To Motion For Reconsideration at 16-17.
Third, Plaintiffs are barred under the doctrine of res judicata from
bringing any further actions in this Court based on the same facts underlying the
previously dismissed complaint. "Although the dismissal of a complaint for lack of
jurisdiction does not adjudicate the merits so as to make the case res judicata on the
substance of the asserted claim, it does adjudicate the court's jurisdiction, and a
second complaint cannot command a second consideration of the same jurisdictional
claims." Boone v. Kurtz, 617 F .2d 435, 436 (5th Cir. 1980) (holding that complaint
A . was properly dismissed under the doctrine of res judicata where the District Court
had already dismissed an almost identical complaint for lack of jurisdiction); Shaw v.
Merritt-Chapman & Scott Corp., 554 F.2d 786, 789 (6th Cir. 1977) (holding that

Case 1 :05-cv—00327-GIVIS Document 80 Filed 09/24/2007 Page 4 of 4
The Honorable Chief Judge Gregory M. Sleet
September 24, 2007
Page 4
plaintiffs were barred from bringing a subsequent suit asserting essentially the same
claims and citing the same jurisdictional basis because plaintiff did not appeal the
dismissal, stating that while "a dismissal for lack of jurisdiction does not constitute
an adjudication upon the merits, it does constitute a binding determination on the
jurisdictional question, which is not subject to collateral attack"). Plaintiffs cannot
simply rework the Consolidated Amended Complaint and add claims (or revise old
ones) in newly filed complaints in the same Court to avoid dismissal. "The res
judicata doctrine . . . not only binds the parties and their privies as to grounds or
issues actually litigated, but also as to any other admissible matter which might have
been offered for that purpose." See Zoriano Sanchez v. Caribbean Carriers Ltd , 552
F.2d 70, 71 (2d Cir. 1977) (citation omitted) (barring second suit arising from
identical facts and issues where court had already dismissed a similar action for lack
of jurisdiction and finding that new claim asserted by plaintiff did not affect the
decision).
lt is also important to note that, even if the Court decides to
reconsider its decision to dismiss the Consolidated Amended Complaint, that
complaint- as well as the two new complaints filed by Plaintiffs — may still be
dismissed for failure to state a claim based on any number of black-letter law
principles, including (1) lack of standing due to the closing of the merger; (2) failure
to make a "demand"; and (3) failure to adequately plead any breach of fiduciary duty
by the Outside Directors under Section 2-405.1 of the Maryland Corporations and
Associations Law.2
We remain available at the Court's convenience to address any
questions about this matter.
Respectfully,
/ {B . .
',/ 1

Edward P. Welch (1.D. No. 671)
cc: Clerk of the Court (by e-file)
Richard H. Morse, Esquire (by e-file)
Laurence D. Paskowitz, Esquire (by e-file)
Jeffrey P. Fink, Esquire (by e-file)
2 More detailed discussion of these points can be found in The Outside Director Defendants‘
Response In Opposition to Plaintiffs' Motion for Reconsideration or Reargument.
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